The NPP is payments infrastructure that enables Australian consumers, businesses and government agencies to make real-time, data-rich payments between accounts at participating financial institutions. It supports real-time clearing and settlement for simple or complex payments and has the potential to deliver significant back-office efficiencies.
The NPP can simplify payments through its Addressing Service, called PayID . It can also support more information sent with payments, such as written text or links to externally hosted documents.
The Platform has been designed to be extensible, meaning it will evolve to meet the future needs of Australian consumers and businesses.
How it works
The NPP uses ISO 20022 messaging schema, an international standard format used for electronic data interchange between financial institutions or organisations that move money and data. The benefit of ISO 20022 is that it is a global interoperable standard that conveys more data than most other messaging formats.
1. The Platform
The NPP is a distributed switch of individual ‘Payment Access Gateways’ that route and exchange financial messages between each other. Payments can be directed to BSB and account numbers or to a PayID (information such as an email address, phone number, ABN number or a unique organisational identifier that can be linked to a user’s bank account). The Platform is always open for business, 24 hours a day, 365 days of the year.
2. The Fast Settlement Service
The Fast Settlement Service (FSS) is provided by the Reserve Bank of Australia. This world-leading capability enables every single payment made on the Platform, regardless of its size, to be settled in real-time in central bank funds between each financial institution’s Exchange Settlement Account (ESA).
3. Overlay Services
‘Overlay Service’ is the term used to describe products and services that ‘sit on top’ of the Platform and its capabilities, potentially in a customised way to define a bespoke payment service or process. Developed with innovation and competition in mind, overlay products or services could offer vastly different experiences, or similar experiences, and in many cases could compete with each other. While the ability to support multiple Overlay Services makes the Platform unique, there is also a great deal of innovation and competitive offerings that can be brought to life by the Platform using the existing messaging and capabilities that may not require an Overlay Service to be created.
What can you do with the NPP?
The New Payments Platform provides innovators with capability building blocks that can be used in different ways to create new payments experiences and enable efficient, cost-effective back-end processing.
There is a broad spectrum of innovative possibilities that could be brought to life by the Platform – from supporting emergency payments, helping corporate treasurers unlock their working capital, embracing more efficient reconciliation, or enabling real-time payments overseas.
Many of these innovative possibilities could incorporate PayID – the Platform’s addressing service that enables payments to be directed to accounts using information that is easier to remember than a BSB and account number, such as a phone number, email address or Australian Business Number.
Outside retail, corporate and institutional banking, the industries and sectors that could benefit from the Platform’s capabilities include insurance, superannuation, ecommerce, payroll, the gig economy, securities and company corporate actions. But the NPP’s potential is not restricted to these sectors alone.
A great deal of innovation could occur ‘before’, ‘after’ or ‘around’ the real-time payment leg of a product or service. Examples of this include the real-time funding or defunding of digital payments wallets, short-term lending, the first or last domestic leg of an international remittance, or QR Code driven products.
Read more about accessing the Platform and the NPP API Framework and Sandbox.
We are focused on developing native capability to support a range of use cases, which can be used by participating financial institutions and third parties to realise different commercialisation opportunities. By developing native platform capability, governed by a common rules framework administered by NPPA, it is akin to providing ‘building blocks’ that others can put together in different ways to deliver payment products and services outside the platform.
NPPA does this by establishing different ‘business services’ that have different uses. A business service can either be used in its native form by participating financial institutions and third parties, or it can be further built upon and commercialised by an organisation wanting to develop an Overlay Service on top.
To download our latest NPP Roadmap, click NPP Roadmap 2019_28 Oct 2019.
We have a range of guides and short discussion papers that illustrate how the NPP can be brought to life.
Resources
Osko by BPAY is an overlay service developed for use on the NPP. Launched in February 2018, its first iteration enables real-time peer-to-peer payments via the user’s regular internet or mobile banking service. It also enables users to include up to 280 characters to describe their payments, including emojis!
To read more about Osko, visit www.osko.com.au